Tag Archives: Progress out of Poverty Index

We are pleased to post an update from Grameen Foundation about the Campaign Commitment that they launched in 2014. Focused on supporting the growth of the use of a very effective poverty measurement tool, the PPI®, their Commitment also underscores the importance of using the data from tools like this in helping to improve the way we support and serve those living in poverty.

You can learn first-hand how such tools can be used, not just to prove that you are reaching the extreme poor, but to improve the services that you offer and the way you interact with the extreme poor. We are organizing a breakout session at the 18th Microcredit Summit called “Innovations in Measuring Social Impact.” Learn more and register today!

>> Authored by Julie Peachey, Grameen Foundation

In early 2014, Grameen Foundation made several commitments, as part of the Microcredit Summit Campaign’s 100 Million Project, towards achievement of the collective goal of helping 100 million families escape poverty. Our commitments focused on demonstrating use of the Progress out of Poverty Index® (PPI®) for measuring household-level poverty, because reaching and lifting people out of poverty requires knowing who is actually poor.

The 2014 State of the Campaign Report features various actors in the microfinance sector that are taking steps to helping their clients lift themselves out of poverty. In this interview with Julie Peachey (director of social performance management at the Grameen Foundation), learn about how the Progress out of Poverty Index® (PPI®) can help organizations better target the poorest. Peachey provides examples of PPI usage as well as recommendations on how to best make use of the results provided by the tool. Below is a summary of the key points from the interview.

Julie Peachey, Director of Social Performance, Grameen Foundation

The Grameen Foundation developed the Progress out of Poverty Index (PPI) because they noticed that microfinance institutions were failing to meet poverty outreach targets, and, worse, there really wasn’t a good way to determine how poor clients actually were.

The PPI is a ten question survey based on a household’s income and expenditures, and it is available for 50 countries. The PPI allows an organization to measure in absolute terms how poor a client’s household is by calculating the likelihood that they are living below one of several poverty lines. Further, the PPI can be used by any organization that has a social mission to serve and reach the poorest.

The PPI can be used for:

Targeting the very poor (those living on less than $1.25 a day) to make sure that they aren’t being excluded.

Product design to make sure that poorer clients aren’t being excluded from the organization’s services based on the way their products are designed.

Tracking progress over time to see if the client is becoming better off and moving out of poverty.

Generally speaking, Grameen Foundation has found that organizations that start using the PPI find that their clients are not as poor as the organizations thought and, as a result, that they aren’t actually reaching the very poor.

For example, at CARD Bank in the Philippines, the Grameen Foundation used the PPI to survey the poverty level of clients receiving a new product in order to determine what CARD needed to do to make the product viable. When they saw the product was not taking off as expected, they lowered the price and then experienced a great increase in clients opening up a new account. They then looked at the PPI score before and after the prices were lowered.

Before the change, approximately 27% of clients who opened an account were below the $2.50 a day line; after the price was lowered, CARD saw an increase in the number of clients opening an account as well as a 7-8% increase in the number of clients opening accounts that were below the $2.50 a day line. The conclusion is that lowering the price of the product made it more feasible to the poorer population.

Organizations are also able to use the PPI to calculate the percentage of very poor households in a given area they are serving. The Grameen Foundation conducted a series of “poverty outreach reports” that looked at “concentration, penetration, and scale, which allows an organization to really look more deeply into what the overall total percentage of poor people that are [being] served ideally to be able to see the progress over time.”

On February 19th, the Mifos Initiative co-hosted with the Microcredit Summit Campaign an E-Workshop sharing insights on open source technology and integrating social performance management into their platform. The Mifos Initiative announced a Campaign Commitment in 2015 to promote poverty measurement tools through the integration of them into their cloud-based core banking system.

Here is what Ed Cable, director of community programs at The Mifos Initiative had to say about the event and the power of our global coalition of Campaign Commitment-makers:

The Mifos Initiative and its global community is driven by creating a common technology foundation for the entire sector to convene around and collectively build new innovation to more deliver financial services to the base of the pyramid. We were honored to share the personal experiences of our community members during the E-Workshop and openly invite and welcome everyone to come join our community. It’s only through the united efforts of the global financial inclusion sector that we can achieve our Commitments to social performance excellence.

The E-Workshop also featured Musoni, which runs a mobile microfinance institution based in Kenya and developed the Musoni tablet app in 2012. The Musoni app is a user-friendly, affordable, and flexible platform that enables MFIs to register, track clients. (Musoni Systems, the firm that designed the app can help your MFIs to use the app as well.) This cloud-based app originally powered by Mifos increases efficiency of MFIs who can operate paperless with field staff collecting data on their tablets. The Musoni app already captures the Progress out of Poverty Index (PPI) data.

Cameron Goldie-Scot, CEO of Musoni Sytems, said of the E-Workshop,

“Musoni has always been committed to increasing the level of social performance measurement in the industry. It was great, therefore, to be able to explain the way we have integrated the PPI surveys into the Musoni System and to hear the feedback and questions from the other participants. In particular, I really enjoyed discussing the impact that tablets and smartphones have in making it easier for field officers to capture data remotely.”

Markus Geiss, a software developer involved with the Mifos Community,told us of his decision to work with Mifos and what he is enjoying as a volunteer in the Mifos Community. A long-time software developer, Markus was looking for a new project to work on that could have a strong impact on society. During the E-Workshop, he guided us through the Mifos X platform and explained us how Mifos is planning to integrate the PPI (Progress out of Poverty Index) in the coming months. Markus finds a real interest in working with Mifos because “sustainable open technologies will help not only the poor but provide better, safer and transparent financial services for all of us”.

Thank you to all panelists for demystifying how these open-source platforms can be a helpful tool in reaching the excluded. We also wish to thank all participants who submitted questions and comments and made the session interactive!

Join us in Mexico for the 17th Microcredit Summit this September 3-5 where savings will take an important place in the agenda.

The Microcredit Summit Campaign welcomes Oikocredit as the newest Campaign Commitment member, joining a global coalition to help 100 million families lift themselves out of extreme poverty.Read the full Press Release

Oikocredit has been increasingly focused on measuring social impact to ensure that the organizations it funds are properly targeting their outreach and have launched their Campaign Commitment to actions fulfilling this aim.

Image courtesy of Oikocredit.

Oikocredit managing director, David Woods, said committing to the Microcredit Summit was in line with Oikocredit’s social mission. “Measuring and monitoring change in microfinance partners and their clients is an important part of Oikocredit’s social and financial activities,” said Mr. Woods.

Dina Pons of Incofin IM, the moderator of the workshop, “Responsible, client-centric practices at every level, and demonstrated commitment to fulfilling its mission,” started the presentation with the following description of Responsible Inclusive Finance:

Every institution along the value chain of “responsible inclusive finance” – whether socially or financially motivated – employs responsible, client-centric practices at every level of its business and demonstrates commitment to fulfilling its mission.

A report on impact investing, a US women’s clothing brand uses the PPI on their workers, learning from RSBY, and results from a report on NRSP’s microinsurance program.EspañolFrançaisContinue reading →

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